Showfields, the self-described "most interesting store in the world," is closing for good after its plan to dig out of bankruptcy, precipitated by the pandemic and the combination of declining sales and mounting debt fails, failed to come to pass. The retailer shuttered its remaining locations in Brooklyn, Washington, DC, and Los Angeles over the weekend. The retailer joins companies across sectors in the US that collapsed at record rates in 2023.
At the time of the filing, CEO and co-founder Tal Nathanel said in a statement, "It pains me to leave our NoHo and Miami stores but we see great things ahead. While it took us a few years to fine-tune, today we know the right economic structure for new locations, as we have shown in our newest stores. We remain dedicated to our mission of redefining the way people discover and experience retail.”
Nathanel attributed many of the retailer's challenges to the fact that the company signed leases for its first two locations before COVID that proved too expensive post-pandemic. “That left us paying unsustainable rent, and therefore leaving us vulnerable and barely over water in other parts of the business that were actually healthy,” he explained.
The stores in Miami and Manhattan were closed in October when the business announced it had filed for bankruptcy and lined up financing from existing investors to restructure through a subchapter of the Chapter 11 process. The Small Business Reorganization Act, Subchapter V, a form of Chapter 11 bankruptcy, was devised during the COVID-19 era to help small businesses keep operating, reorganize, and maintain control of their finances without creditors taking over. According to the court filing, Showfields had a little over $3,000 in cash on hand when it filed on October 6 and owes between $1 and $10 million.
The plan hit a snag at the end of the year when landlords had an issue with its bankruptcy financing. The Brooklyn landlord filed an objection on December 5 to the final approval of its debtor-in-possession financing “to be provided by an entity controlled by one or more insiders” at Showfields. A group of investors cited a similar concern in an objection filed at the end of November. The DIP lender is listed as Showfields Investment LLC, with the loan agreement between the lender and Showfields for up to $2.5 million.
A company-wide memo confirming the closures that was shared with Retail Dive and posted on X by Jeanna Liu, the founder of Cowbell Plant Co., told vendors that there was no update on the bankruptcy proceedings and advised them on the potential to file claims as creditors. They also communicated an inability to cover return-to-vendor shipping costs.
The Showfields email also said, “While we successfully built custom experiences for over 1,000 brands and welcomed over a million visitors, the business model of the flagship store has proved challenging.”
Backed by $9 million in seed funding led by Hanaco Ventures, with participation from Swan & Legend Venture Partners, Rainfall Ventures, Communitas Capital, and IMAX CEO Richard Gelfond, Showfields opened its first 14,000-square-foot flagship in New York City’s NoHo neighborhood in 2019.
The concept was launched by a trio of visionary founders—Tal Nathanel, real estate developer Amir Zwickel, and Katie Hunt, a marketer and co-founder of The Fund venture capital firm—with a disruptive idea: talking a big game and setting a very high bar for themselves.
Described as the “most interesting store in the world,” Showfields set out to reinvent the staid department store model, creating an interactive space that took cues from art museums and immersive theater performances and focusing on everything that e-commerce cannot do well—enabling discovery, trial, and using all five senses to inform a purchasing decision.
The lifestyle discovery store featured rotating, themed curations of mission-driven products, art, and events to make the retail experience more interactive and engaging. The merchandising assortment flipped every six months and was built around wellness, home, food and beverage, beauty, ready-to-wear, accessories, and tech brands that were not widely distributed. The products were displayed amid unconventional decor, oversized sculptures and artwork. Showfields also reinvented the traditional wholesale model predicated on purchasing inventory. Their model charged a fee based on the scope of the presentation to merchandise a brand's product in the store.
In March 2022, Showfields raised $20 million with Hanco Ventures, Swan and Legend Ventures, MUFG Capital, and others to fuel expansion. The concept rolled out to Miami, Washington, DC, Brooklyn, and a pop-up in Los Angeles.
News that Showfields would be unable to make it through to the other side of bankruptcy is a blow to retail innovation and start-up consumer brands looking for distribution partners that provide an accessible path to physical retail. While customers went to brick-and-mortar stores in droves post-pandemic, squashing predictions that shopping would continue to move online, the department store model that Showfields ambitiously set out to disrupt in 2019 remains relatively unchanged and continues to struggle for relevance in the US market.
Showfields' struggles and unfortunate demise are reminders of the investment required to create meaningful disruption in a landscape owned by incumbents as well as the volatility of the retail sector. For a moment, Showfields provided a glimmer of hope for what a department store could be.
